Following concerns expressed by the United States Securities and Exchange Commission (SEC) over the Church of Jesus Christ of Latter-day Saints' investment reporting in 2019, the LDS church has agreed to pay the United States Treasury $5 million.
$5 Million Settlement
According to a report from abc4, the church has stated that it will pay the $5 million settlement using investment returns and that these profits will be given to the United States Treasury "shortly." The LDS Church, Ensign Peak Advisors, which manages the church's investments in stocks, bonds, real estate, and agricultural properties, used a different method when reporting liabilities.
The rule requires investment managers such as Ensign Peak to submit forms with the SEC every quarter that publicly reveal the names of the assets that make up a public equities portfolio and the values of those securities. The LDS Church stated that Ensign Peak had been consulting with legal counsel since 2000 to determine how it could protect the privacy of the portfolio while still complying with its reporting duties.
As mentioned, instead of submitting a document that consolidated the church's investments, Ensign Peak constituted multiple corporations operating under limited liability firms, each of which submitted individual forms. The LDS Church and Ensign Peak have expressed their belief that all securities required to be reported have been included in the respective filings made by the LLCs.
Ensign Peak was reportedly the one who created and filed the reports, so according to the church, no senior authority in the church was responsible for their preparation or filing.
According to reports from June 2019, the SEC had concerns with how Ensign Peak was reporting the LDS Church's portfolio. Reportedly, once the problems were brought to light, Ensign Peak resorted to filing a single aggregated report to comply with the requirements set forth by the SEC. As of the transition, 13 quarterly notices that fully comply with SEC regulations have been filed with the agency.
As per the statement issued by the Church of Jesus Christ of Latter-day Saints, the church and Ensign Peak Advisors, Inc., an investment manager linked with the church, have settled with the SEC. The settlement is related to how the forms were submitted in the past. Over several months, Ensign Peak and the Church worked with the government to solve the problem. They reaffirm their commitment to operating under the law, acknowledge that errors were committed, and will now consider this matter to be resolved.
Investigation of SEC to Church of Latter-day Saint Investment Disclosures
An investigation was conducted by the United States Securities and Exchange Commission into how an investment business working on behalf of The Church of Jesus Christ of Latter-day Saints declared its stock ownership before the year 2020, the Deseret News reported.
The SEC investigated whether or not Ensign Peak Advisors Inc. complied with disclosure standards that apply to large investment managers. An ex-employee of Ensign Peak named David A. Nielsen filed a complaint with the Internal Revenue Service (IRS) in November 2019, stating that the church, a nonprofit organization, should be required to pay taxes on returns made from invested tithing payments. Nielsen contested the tax-exempt status of the religious organization as well.
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The Mormon church and its investment arm agreed to settle US SEC allegations that it failed to file proper disclosures and obscured its investment portfolio https://t.co/y4PyHgAt8y
— Bloomberg (@business) February 21, 2023
